Two separate research forecasts point to a miserable rest of the year for the global smartphone and 5G industry as the Covid-19 outbreak and subsequent lockdowns hit the value of the European smartphone market and hinder the ability to roll out 5G networks.

In what it says is the sharpest reversal the phone industry has seen across Europe for 20 years, IDC is forecasting that the European smartphone market is likely to fall in value by more than a quarter this year in the aftermath of widespread national lockdowns to combat the spread of coronavirus.

In a worst-case scenario, the value drop could be close to a half. This would amount to a far bigger fall in market value than was seen across the region in the 2008 financial crisis, when European phone market value fell by 6.3% in 2008 and by 13.1% in 2009 in dollar terms.

IDC observed that in the first quarter of 2020, the initial result of the coronavirus crisis was disruption to phone supply, but markets now face a completely new situation in collapsing demand.

“In addition to the increasing number of economic forecasts that the drop in GDP in major European countries could be double that seen in 2008, if lockdowns need to continue towards the summer, we have to take into account other factors in the current situation,” said Simon Baker, programme director for devices at IDC EMEA. “Much of phone retail is shut, while for the rapidly growing numbers of newly unemployed, their priority this year will be just getting by.”

Overall, IDC expects the biggest impact in Europe to be felt by countries such as Italy and Spain, but under its probable scenario, it calculates that nearly all European markets will drop by about one-fifth.

The study highlighted that despite the ongoing discussion about OpenRAN and open networks, most advanced 5G networks still rely on tier one infrastructure suppliers, and their supply chain has been disrupted. It cited shortages of component manufacturing and/or network workforce deployment, such as integration engineers, are the main reasons for this disruption.

ABI believes such disruptions will cause 2020 5G network infrastructure revenue to fall by as much as 10% of the forecast US$2.1bn.

“This may mean operators that have already deployed a significant number of base stations will be in a better position to become early adopters and benefit from an earlier transition from previous generations to 5G, but this will rely on the availability of relevant handsets. In the short term, 5G radio deployments will be delayed further due to geopolitical constraints and Covid-19.”

In a call to action, ABI advised mobile operators to broaden their supply chain and avoid a single-supplier infrastructure market. Striking a more optimistic note, the analyst maintained that the effects of the virus could accelerate more innovative use cases and services such as remote surgery and health monitoring.

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Unified Communications: the key to prospering in the new working reality of Covid-19

The coronavirus is changing everything about how people work, and will do so permanently. It added that even though the working world was experiencing unprecedented uncertainty, there were two things that should be borne in mind: the virus will pass, and at the other side of the pandemic, the world of work will look very different.

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